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Northern Rock sinks to record low

Posted: Wednesday, January 16, 2008, 13:51 (GMT)
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Brown defended his handling of the Northern Rock crisis on Wednesday as the opposition accused him of dithering and delaying in finding a solution.

"We had to intervene to ensure stability, so the instability of Northern Rock would not spread out across the economy. That is what we've achieved over the last four months and the opposition should be supporting us not criticising us," he said.

Brown said it was still the government's intention that all the taxpayer support for Northern Rock would be repaid, but he refused to answer questions about how much public money had been committed.

Brown refused to confirm the figure when asked by Conservative leader David Cameron if total taxpayer support for Northern Rock, including guarantees, was now 55 billion pounds, saying he would "not provide a running commentary on figures".

Cameron accused Brown of indecision when he could have pushed for a quick sale to Lloyds TSB soon after the crisis broke out.

Brown said his advisers had not counselled him to push for an immediate sale after the bank run and said there had been no offer from Lloyds TSB.

Industry sources have previously said Lloyds TSB came closest to buying Northern Rock and held talks but did not make an offer.

Northern Rock shareholders on Tuesday backed proposals to curb some of the board's powers but stopped short of forcing it to ask for approval for any asset sales.

Bryan Sanderson, Northern Rock's chairman, said he was "reasonably confident" the bank could avoid nationalisation and talks with two suitors continue, while a standalone solution was still possible.

But he said financing a rescue package remained a challenge and a decision on nationalisation rested with the government and not the board.



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